Houston City Council Approves Plan to Increase Federal Flood Insurance Discounts
Houston residents could see a greater discount on their federal flood insurance premiums as soon as next spring after the Houston City Council on Tuesday approved a watershed master plan expected to improve the city’s class rating in FEMA’s National Flood Insurance Program.
Pursuing the watershed master plan will boost Houston’s class rating from a class 5 to a class 4 or 3, giving Houston residents a 5% or 10% increased discount on their NFIP policies. As a class 5-rated city in the NFIP’s Community Ratings System (CRS), Houston citizens currently receive a 25% discount on federal flood insurance.
Participating communities in the CRS are awarded class ratings ranging from 10 (lowest) to 1 (highest) based on their degree of compliance and documentation with CRS recommended activities. As a community’s rating improves, the amount of flood insurance premium discount available to policyholders improves as well. A 5% premium reduction accompanies each improved class rating.
Houston Public Works interim director Richard Smith confirmed to the City Council the discounts would go into effect by April 1, 2025.
According to a handout provided by Houston Public Works, a CRS Watershed Master Plan is an assessment of watersheds in a city, including an evaluation of existing development, major drainage features, runoff conditions and the impact on downstream systems, and plan to handle drainage for future development.
FEMA will take into account the watershed master plan as it conducts its annual audit, which is expected to be complete by mid-August.
Houston is all too familiar with major flood events. Just this year, the city has experienced two major floods, the first a May downpour that closed schools, forced evacuations and caused damage to 800 properties. The second, Hurricane Beryl, brought 6 to 12 inches of rain to parts of Houston earlier this month.
In 2017, Hurricane Harvey struck Houston, flooding thousands of homes and causing an estimated $125 billion in damage in Texas. A report after the storm found that an inconsistent regulatory environment and a lack of awareness of flood dangers contributed to flood damages in the region.
Since then, Houston and wider Harris County has spent close to a billion dollars to reduce the risk of flooding for residents, Alan Black, an engineer with the Harris County Flood Control District, told ABC 13 in 2022.
Houston’s efforts to mitigate against flooding have the made the city the largest beneficiary of CRS discounts in Texas. City of Houston residents with NFIP policies received a total of $13.9 million in discount premiums in 2023 because of the city’s class 5 rating.
A watershed master plan is the final prerequisite for Houston to reach a class 4 rating in the CRS. The city already satisfied the prerequisites of having proper flood warning and response/dams, appropriate building codes and a hazard mitigation plan.
The city of Dallas in 2022 became the first Texas community to earn a class 4 rating in the CRS. Dallas is currently one of only two Texas cities with that distinction.
Photo: May 30, 2015 – Addicks Reservoir Park, Houston, TX: Standing flood waters over roads and fields